The major economic crisis, coupled with the increase in the price of oil, which has significantly affected domestic air traffic demand, has resulted in some weak traffic routes having ceased to be economic interest for the operating companies, so that they have abandoned the service in the last few months. Such is the case with the Madrid-Mahon route during the off-season, whose limited capacity to generate demand assumes that, in the current market conditions, it lacks economic interest for the operators.

However, this link is a key element in ensuring the mobility of citizens living in Menorca, whose remoteness from the rest of the national territory gives air-mode a vital importance for maintain adequate connectivity to the rest of the national territory.

The abandonment of the exploitation of this route and the non-existence of alternative modes that replace the air mode efficiently, make it necessary to establish public service obligations in accordance with the reality of the the market, so that the operation of this link is permitted by means of operating conditions appropriate to the volume of traffic and the maintenance of the communication between Madrid and Menorca.

In accordance with the provisions of Article 149.1.20. of the Constitution, which gives the State exclusive competence in the field of air transport, it is up to the Government of the Nation to establish service obligations. public in relation to scheduled air services between airports located on Spanish territory, and the Ministry of Public Works of the European Union, implementing the measures provided for in Regulation (EC) No 1008/2008 of 24 September 2008 to ensure compliance.

The Government of the Illes Balears has requested from the Government the declaration of public service obligations in the air route between Menorca and Madrid during the months of low demand, which guarantee a minimum supply of services In order to maintain the air communication with Madrid, following the cessation of the operations of the two companies that have been operating in the past few seasons.

In application of Law 66/1997, of December 30, of Fiscal, Administrative and Social Order Measures, in which the Government of the Nation was entrusted to proceed with the declaration of public service obligations in respect of the traffics between the Balearic archipelago and the peninsular territory and of Regulation 2408/92, today recast in the aforementioned Regulation 1008/2008, and since this is a new Agreement, has been given prior hearing to the Government of the Balearic Islands and has been informed the companies that are currently operating the Balearic market and the airports involved. The provisions of Article 95 of Law 2/2011 of 4 March 2011 on Sustainable Economy are also applicable to these transport services of public interest.

The public service obligations will come to cover, temporarily, a demand for direct transport services insufficiently attended by other modes of transport. The Ministry of Public Works shall ensure the proper functioning of the public service provision.

In its virtue, on the proposal of the Minister of Public Works, prior to the report of the Committee of the Government of the Government for Economic Affairs, the Council of Ministers, at its meeting of 15 June 2012, agrees:

First.

Declare public service obligations in the air route between Menorca and Madrid in the terms set out in the Annex to this Agreement.

Public service obligations shall take effect from the day following that of the publication in the Official Journal of the European Union of the information note referred to in the second subparagraph of Article 16 (4). of Regulation (EC) No 1008/2008 of the European Parliament and of the Council of 24 September 2008 on common rules for the operation of services in the Community.

Second.

Declared public service obligations, the Community air carriers interested in the performance of scheduled air services will present their service programmes to the Directorate General of Civil Aviation of the Ministry of Development.

Third.

Examined the programmes of the airlines for the period in which the public service obligations are established and their adequacy to those obligations, the Directorate General of Civil Aviation of the Ministry of Public Works notify air carriers if the service programmes submitted are in line with or not meet the requirements laid down and shall, if so, communicate the date of commencement of the service.

Fourth.

If within one month, as of the date of publication of the information note in the Official Journal of the European Union, no air carrier has submitted a service programme in accordance with its obligations. public service imposed for the route without requesting any economic compensation, the access to the affected route shall be limited to a single air carrier which shall be compensated with the amount necessary to agree to comply with the obligations public service.

In this case, the right to provide the services will be offered by public tender in accordance with the procedure laid down in Article 17 of Regulation (EC) No 1008/2008 of 24 September 2008.

The tenders submitted by the tendering companies shall specify the amount requested for compensation for the operation of the services for each of the two eight-month periods for which the tenders are to be tendered. services provided for in this Agreement. The compensation to be set shall not exceed the amount of EUR 1,2 million for each of the two periods mentioned.

The compensation requested may be modified only if unforeseen circumstances exist in the operating conditions of the services. In such a case, the modification of the declared obligations and their compensation shall be subject to the provisions of Article 95 of Law 2/2011 of 4 March 2011 on Sustainable Economy.

Fifth.

The administrative contract of service will be governed by Regulation (EC) No 1008/2008 of 24 September 2008 and by Royal Decree of 14 November 2011, Royal Decree 3/2011, approving the recast of the Law of Public Sector Contracts and other applicable provisions.

Sixth.

Air services will begin to be provided within one month of the signing of the service contract.

Seventh.

The Directorate General of Civil Aviation will carry out the necessary actions to achieve and verify compliance with public service obligations.

The Ministry of Public Works will adopt the measures that are necessary for the implementation of this agreement; in particular, those that require an adequate response to a serious interruption of services and those aimed at reducing temporarily the quality parameters relating to the minimum supply in terms of frequencies and number of seats when there is a situation of significant drop in the demand for service which makes it impossible to comply with the requirements laid down in the this agreement. If such a situation is maintained for a period exceeding two consecutive seasons of IATA traffic, approval of new measures by the Council of Ministers shall be required.

Eighth.

The air carriers must provide the Ministry of Public Works and the Government of the Balearic Islands with the statistical results of each traffic season, one month after their completion, and the periodic data relating to the evolution of the traffic, number of passengers carried, flights carried out and ticket revenue.

Ninth.

The infringements committed by air carriers in relation to public service obligations will be subject to the sanctioning regime established by Law 21/2003 of 7 July of Air Safety.

Tenth.

The Ministry of Development will prepare an annual report on the evolution and situation of the air transport market on the route Menorca-Madrid and on the public service obligations in the off-season, which it will send to the Commission Government delegate for Economic Affairs before June 30 each year, for assessment.

ANNEX

I. Air routes affected

Public service obligations are declared in the regular direct air services provided on the route Menorca-Madrid during the period of low demand which includes the months from 1 October to 31 May (8 months).

II. General Conditions

1. Community air carriers wishing to operate scheduled air services in accordance with the public service obligations covered by this Agreement shall be in possession of a operating licence in force, in accordance with the provisions of this Agreement. established by Regulation (EC) No 1008/2008 of 24 September 2008.

2. Each company must submit to the Directorate General of Civil Aviation, on the dates and deadlines stipulated in paragraph 3 of this heading, the program of operations on the route submitted to public service obligations. This programme of operations shall be presented on an individual basis with respect to the flight schedule which the air carriers may submit for operation on other routes.

The program of operations on the route submitted to public service obligations will include the following information:

a) Period of operation of the corresponding traffic season, established by the International Air Transport Association (IATA).

b) Flight identification number.

c) Operation Horarios.

d) Capacity offering.

e) Period and days of operation.

f) Aircraft type/number of seats/load capacity.

g) Configuring the passenger cabin, if any.

h) Written knowledge and acceptance of the conditions of continuity and delivery of the service program within the framework of the public service obligations provided for in this agreement.

Any permanent modification of the approved flight schedule for each company will require the approval of the Directorate General of Civil Aviation.

In addition, the company will have to forward detailed prices and conditions of the tariffs to be applied, in accordance with the specific requirements set out in paragraph 1.3 of Section III of this Annex.

3. The following shall be taken into account for the presentation of the flight programmes:

3.1 Each company will present its services program at least thirty calendar days before the scheduled start of operations, and will include the service program for the part of the IATA traffic in which the operations are initiated together with the schedule for the months of the period in which public service obligations entered into the following season have been established.

3.2 The initiation of the services may be carried out once they have been expressly approved by the Directorate General of Civil Aviation. However, the service programmes shall be deemed to have been approved if, on the date of their commencement, the Directorate-General for Civil Aviation has not acted in this respect.

This approval should be subject to control over the adequacy of the programme with the content of the public service obligations, taking as a reference the whole of the operators ' programmes. interveners.

4. Air carriers will undertake to operate their service programme during the eight-month period in which the route is subject to public service obligations. In the face of a new entry, or a significant increase in an operator's flight schedule, the other companies operating the route will be able to choose between maintaining their programming or adjusting their service program, without prejudice to compliance with the the public service obligations. However, a company may terminate definitively in the provision of services prior to communication to the Directorate General of Civil Aviation at least six months in advance.

5. In the event that the coefficient of occupancy recorded in the route exceeds, on average, for any of the two periods of 8 months in which public service obligations have been established, 75%, the carriers with service programmes They shall take appropriate measures to increase the supply of capacity to reduce this level, unless they offer more beneficial tariffs for users.

6. For the purposes of this Agreement, an air fare shall mean the price expressed in euro which passengers must pay to air carriers or their agents for their carriage and the carriage of their luggage, whichever is the same, with a 22 kilograms of weight, in accordance with the conditions in each applicable case. The fee also includes the remuneration and the conditions offered to the agencies and, where applicable, the charge for issuing a ticket registered with the Directorate General of Civil Aviation, as well as the public property benefits, fees and applicable taxes with the exception of property benefits for passengers and security.

The final price of the transport contract will include the following concepts: the price of the fare, the passenger and the security benefit.

III. Specific conditions

1. The specific conditions for public service obligations, for the route referred to in item I, shall be as follows:

1.1 Period of operation, minimum frequency, schedules, and capacity offered.

The operating period is constituted by the months from October 1 to May 31 of the following year, both included.

The service to be provided will be at least two daily frequencies (four flights) throughout the period.

From Monday to Friday, one of the frequencies will be early in the morning and another one late in the afternoon. The first flight of the morning will start between 7:00 and 9:30 and the last of the afternoon between 19:00 and 21:30, local time, taking into account the operating limitations of the airport of Menorca. Schedules shall allow users, whatever the origin of the flight, to make one round trip on the same day, with a minimum margin of seven hours at destination. On Saturdays and Sundays, the company will freely set schedules.

The minimum capacity offered during the entire operating period will be 90,000 seats.

1.2 Air fares.

In the framework of the public service obligations to be established, the reference fee is set at EUR 130 on the first leg.

However, companies will be able to freely set promotional rates with discounts on this reference rate.

The Director General of Civil Aviation will proceed in January of the second annual period of application of the PSOs, at the request of the companies operating on the route submitted to public service obligations, to the revision of the previous reference rate in the quantity equivalent to that resulting from the transfer to the established reference tariff, the effects of the application of the corresponding increase or, where appropriate, the year-on-year decrease of the month of December of the Index National General of the Consumer Price Index System, on the directly affected costs for the annual variation, estimated at 73% of the total cost structure of an air carrier.

For the set of aeronautical charges comprising the landing and airport transit services, the approach rate and the rate for the use of the air navigation aid network, take into account the increases or, where appropriate, decreases authorised for each of them that year in the general budget law of the State or in their specific legislation, which shall be transferred to the tariff, with the weight of such variations up to a maximum of a three percent share in the cost structure for each of the four concepts above.

In any event, the fee revision shall not affect the amount of the public property, fee and rate, which shall be payable in accordance with the amounts established. The review shall be notified to carriers operating the services.

Also, in the event of abnormal, unforeseeable and non-unforeseeable variation of the carriers, of the cost elements affecting the operation of these air services, and on the proposal of the air carriers or the General Directorate of Civil aviation, the Minister for Development may modify the reference rate in proportion to the variation in costs experienced.

The tariff, as already amended, will be notified to the carriers operating the said services, will be applicable within a period adapted to the circumstance and will be communicated to the European Commission for publication in the " Journal Officer of the European Union ".

For the establishment of flexible and promotional rates, companies will meet the following criteria and procedures:

i. The coefficient of occupancy laid down in paragraph 5 of heading II may be exceeded on condition that the price of the tariffs applied to the capacity exceeding that 75% is at least 20% lower than the reference rate.

ii. Companies may request the General Directorate of Civil Aviation to establish flexible fares with the following conditions:

(a) The price of the resulting higher rate may not exceed 25% at the price of the reference rate.

(b) Companies will be obliged to offer passengers fares lower than the reference rates, in the quantity and with the price required to compensate for the additional revenue obtained by the application of flexible tariffs, whatever their price.

(c) The amount of fares lower than the reference rate offered by each company will be conditioned by the average income per passenger obtained by that company and calculated for the period of establishment of obligations of public service, which shall be at most, equal to the reference rate fixed and weighted by its period of application.

(d) The number of seats occupied on each flight with these flexible fares may not exceed 50% of the places offered.

e) Rates lower than the reference rate, may not contain conditions where such prices are not at least 20% lower than the reference rate.

f) Companies will make maximum efforts to address last-minute demand situations for reasons of extreme need.

g) In the event that the average income per passenger transported in the period of public service obligations for each company exceeds the reference rate, the company has an obligation to compensate passengers in the following period in an amount equal to the total amount resulting from the average income on the weighted reference rate on the total of the passengers transported. If that compensation does not occur, it would apply to it as set out in Article 45.3.1. of Law 21/2003, of July 7, of Air Safety.

1.3 Air carriers will be obliged to register all their reference and flexible fares in the Directorate-General for Civil Aviation, within a period of not less than 30 calendar days before the scheduled date of entry into force. effect. Such tariffs shall be deemed to have been approved if 15 calendar days have elapsed before their entry into force, the Directorate-General for Civil Aviation has not acted. The tariffs will take effect once approved, informing the Government of the Balearic Islands.

The commercial promotional rates that may be offered by the companies may be submitted for registration with 48 hours in advance of their entry into force, considering approval if there is no notification in

1.4 The airlines will be obliged to provide the Directorate General of Civil Aviation with the information, both operational and economic, that is required to carry out the timely verification of the established in this agreement.

In particular, the companies will establish internal management procedures to verify that the average income remains within the established limits. Companies shall be obliged to inform the Directorate-General of Civil Aviation when such a limit is transiently exceeded, informing them of the measures envisaged for their subsequent compensation.

The Directorate General of Civil Aviation will ensure the confidentiality of the data obtained.

1.5 The conditions of accreditation of residents as well as the liquidation of air carriers by the previously applied bonuses must be carried out in accordance with the rules governing this type of aid. public. In any case, the prices of the established rates will be subsidised in the amount legally established.

1.6 For the purposes of this Agreement,

(a) Reference rate: the fare under the price control of the State from which, the companies could establish the flexible and promotional rates of commercial character.

(b) Flexible rate: the tariff for which the price may not exceed 25% of the reference rate with the conditions laid down in paragraph (ii) above.

2. Air carriers will take into account their obligations in the application of the specific rules on bonuses to large families.

3. Continuity of service.

Except in cases of force majeure, the number of flights cancelled for reasons directly attributable to the carrier may not exceed, per period of establishment of public service obligations, 2 per 100 of the number of scheduled flights.

Again, except in case of force majeure, in 90 per 100 of the flights, delays for reasons directly attributable to the carrier may not exceed fifteen minutes.

In the event of disruption of services for exceptional reasons, airlines providing services subject to these public service obligations will be obliged to make all necessary efforts to restore the service as quickly as possible.

4. Marketing of flights.

In relation to the information to be provided to the user and the non-discrimination of the fares offered or advertised will be in accordance with Article 23 of Regulation (EC) 1008/2008 of 24 September 2008.